FIVE million households faced bigger gas and electricity bills from yesterday when a second price rise in 10 months came into effect.

Last month Powergen announced it was putting up electricity by 7.2 per cent and gas by 11.9 per cent for most residential customers. In November it raised electricity by 8.9 per cent and gas by 9.6 per cent.The rises will increase average bills by around £70 a year.

The company, which blames a continued rise in wholesale energy prices for the increases, said around 800,000 of its six million customers would be unaffected because they were on fixed tariffs. There will also be £18million available to help vulnerable customers.

Powergen's rival EDF Energy is to raise electricity prices by 10.7 per cent and gas by 12 per cent with British Gas expected to follow suit later this year.

Allan Asher, chief executive of watchdog Energywatch, said: "We think they are very ready to pass on all of the costs and all of the risks to consumers."